An agent asked me about a scenario where his client was taking their required minimum distribution (RMD), but didn't need the money. Their client was looking for a better way to "spend" the money from the RMD.
Our agent discovered that his client's goal was to replenish his principal, so he'd have more to leave to his beneficiaries. Here's how we solved the problem.
- Client: Male, age 71
- RMD: $18,867 annual (from $500,000 principal)
- Goal: Replenish principal
Use funds from the RMD to fund a life insurance policy
- Annual Premium: $14,000
- Death Benefit: $490,478
- Commission to Agent: Over $11,000
How many of your existing clients are looking for a way to leverage their RMD?